Customer Loyalty:

Customer loyalty is all about attracting the right customer,

getting them to buy, buy often, buy in higher quantities and

bring even more customers.

Develop consumer loyalty:

Loyalty rewards has something of a double meaning. Most people

think of it as a marketing tool that encourages people to become

repeat customers. This usually takes the form of punch cards for

an eventual free cup of coffee at a cafe or a point system that

leads to free or discounted airline miles, food, or hotel rooms.

To build loyalty, Retailer should,

1. Keeping touch with customers using email marketing, thank

you cards and more.

2. Treating your team well so they treat your customers well.

3. Showing that you care and remembering what they like and

don’t like.

4. You build it by rewarding them for choosing you over your

competitors.

5. You build it by truly giving a damn about them and figuring

out how to make them more success, happy and joyful.

How firms ensure consumer loyalty?

This list of ten items will help to understand that how retailers

can ensure customer loyalty.

1. Thank customers for doing business with you: The value of the

product or service will determine what is appropriate. High cost

service deals warrant a handwritten note; even smaller cost

transaction companies can send pre-printed appreciation notes to

customers on a scheduled basis.

2. Stay in contact with existing and past clients on a consistent

basis: By not forgetting them, they won’t forget you. Phone

calls, note cards or postcards, newsletters, and email are only

some ideas. Consider also opportunities for personal contact, a

good idea in our high-tech, low-touch world.

3. Give the customer more than they expect. Anticipate a need and

fill it: Answer a question before they ask it. Delivering more

than they expect is one of the most powerful ways to gain

customer loyalty.

4. Listen: Take time to truly listen to what your customers say,

and if they don’t volunteer information—ask for it.

5. Pay attention to the obvious: Mind your manners. Use please

and thank you. Be on time for meetings. Promptly return phone

calls and e-mail messages.

6. Make realistic promises—and be consistent: It is far better to

promise something in a week and deliver in three days than the

other way around.

Which factors effects consumer loyalty?

The 6 key factors that influence customer loyalty

There are six major factors that play key roles in influencing

the loyalty and commitment of customers:

Figure 1: Factors that influence customer loyalty

Source: The Loyalty Guide (TheLoyaltyGuide.com )

In this article is offering practical insights into the workings

of customer loyalty programmers and the ways in which they can

positively influence shoppers' behavior toward the company. The

result is that customer retention is not only increased but

customer lifetime value and profitability is also likely to

increase significantly thanks to longer-lasting and more relevant

customer relationships.

Factors influencing loyalty

Looking in more detail at the major factors that influence

consumers' loyalty - not only to retailers but also to suppliers

in all sectors, including business to business (B2B) - the six

key areas of focus identified in the report can be summarized as

follows:

1. Core offering

The companies that boast the highest levels of fiercely loyal

customers have built that loyalty not on card programmers or

gimmicks, but on a solid, dependable, core offering that appeals

to their customers. These companies have focused intently on what

they know appeals to the type of customers they want to attract,

and have determinedly concentrated on delivering what is expected

every time. North American retailer, Nordstrom

(www.nordstrom.com), is well known for the loyalty of its

customers. It built this loyalty by understanding what its

customers wanted and then empowering its employees to deliver

those needs consistently.

Clearly, the data from a good loyalty programmer should help the

operator to improve this core offering by tailoring and molding

it more closely to the customers' needs and desires.

Elements of the core offering that have a large role in building

customer loyalty include:

Location and premises

Location and premises clearly play a part in engendering loyalty.

The Three L's of retail - "location, location and location" - are

undoubtedly important, and attractive and functional premises are

equally so.

Service

Whether selling services or products, the level of service

perceived by the customer is generally the key to generating

loyalty. It can be argued that some customers buy only on price,

so all that is necessary to retain their loyalty is consistently

low prices. To certain extent that is true. But in most cases,

any loyalty shown will be only to the prices instead of the

business. Should a competitor offer even lower prices, those

customers are likely to defect. Companies that have adopted a

policy of everyday low prices (EDLP) can be more vulnerable to

competition than those who have built their customers' loyalty on

superior products or service.

The UK supermarket chain Asda has chosen EDLP instead of a

loyalty programmer as a strategy, with great success. Why has

this worked so well? Because Asda offers great levels of service

and a comprehensive range of products as well as low prices. In

other words, it differentiates itself from other supermarkets

that rely purely on EDLP to draw and keep customers. Asda's

customers are loyal not only to low prices but to the whole

shopping experience.

The product or service

The products or services offered must be what customers want. The

days when businesses could decide what they wanted to sell or

supply, and customers would buy it, are long past. The customers'

needs and wants are now paramount. If you don't meet them,

someone else will.

2. Satisfaction

Clearly, satisfaction is important; indeed essential. But, taken

in isolation, the level of satisfaction is not a good measure of

loyalty. Many auto manufacturers claim satisfaction levels higher

than 90%, yet few have repurchase levels of even half that. The

situation is stacked against the business: if customer

satisfaction levels are low, there will be very little loyalty.

However, customer satisfaction levels can be quite high without a

corresponding level of loyalty. Customers have come to expect

satisfaction as part and parcel of the general deal, and the fact

that they are satisfied doesn't prevent them from defecting in

droves to a competitor who offers something extra.

The point is that, while high levels of customer satisfaction are

needed in order to develop loyal customers, the measure of

customer satisfaction is not a good measure of the level of

loyalty. The two are not measuring the same thing.

3. Elasticity level

Elasticity expresses the importance and weight of a purchasing

decision - effectively the level of involvement or indifference.

This applies to both the customer and the business.

Involvement

The customer's involvement in the category is important: the more

important your product or service is to the customer, the more

trouble they have probably taken in their decision to do business

with you, and the more likely they are to stick with what they

have decided. Most customers would be highly involved in the

category when choosing a new car, a new jacket, or a bottle of

wine. However, when choosing a new pair of shoelaces, involvement

is not usually high. Businesses dealing in commoditized products

and services cannot expect high involvement and need to earn

loyalty in other ways.

Ambivalence

The customer's level of ambivalence is also important. Few

decisions are clear cut. There are usually advantages and

disadvantages to be balanced, and vacillation is unstable. Again,

we see that the more commoditized a product or service, the more

difficult it is to cultivate loyalty. It is only when points of

differentiation are introduced that the customer has a valid

reason for consistently preferring one particular supplier.

4. The marketplace

The marketplace is a key factor in the development of loyalty.

The elements most closely involved are:

Opportunity to switch

If the number of competing suppliers is high and little effort is

required to switch, switching is clearly more likely. Conversely,

the more time and effort invested in the relationship, the more

unlikely switching becomes. The level and quality of competition

has a significant effect on how easy it is for a customer to

switch from any one particular supplier. When competitors are

offering very similar products at similar prices, with similar

levels of service, some means of useful differentiation has to be

found in order to give customers a reason to be loyal.

Inertia loyalty

This is the opposite of ease of switching. Most banks enjoy a

high level of inertia loyalty simply because it's often so

difficult and time-consuming to change to a new bank and transfer

direct debits and standing orders.

5. Demographics

According to Jan Hofmeyr and Butch Rice, developers of The

Conversion Model (which enables users to segment customers not

only by their commitment to staying with a brand but also to

segment non-users by their openness to switching to the brand),

more affluent and better educated customers are less likely to be

committed to a specific brand. They say that the commitment of

less affluent consumers to the brands they use is often unusually

strong - possibly because they cannot afford to take the risk of

trying a brand that might not suit them as well. They also

suggest that younger consumers are less committed to brands than

older consumers.

Interestingly, these differences carry over into cultural groups

as well: they find that French-speaking Canadians are more likely

to be committed to a brand than English-speaking Canadians, and

Afrikaans-speaking South Africans are more likely to be committed

than English-speaking South Africans. In their excellent book,

Commitment-Led Marketing, they show how commitment norms for the

most frequently used brand of beer vary from country to country.

At the two extremes we see both Australia and the UK (58%) and

South Africa at 83% - a considerable difference.

6. Share of wallet

As markets become saturated and customers have so much more to

choose from, share of wallet becomes increasingly important. It

is cheaper and more profitable to increase your share of what the

customer spends in your sector, than to acquire new customers.

After all, that's what loyalty is really about. Totally loyal

customers would give you a 100% share of their spending in your

sector.

Retail store:

Retail is the sale of goods and services from individuals or

businesses to the end-user. Retailers are part of an integrated

system called the supply chain. A retailer purchases goods or

products in large quantities from manufacturers directly or

through a wholesale, and then sells smaller quantities to the

consumer for a profit. Retailing can be done in either fixed

locations like stores or markets, door-to-door or by delivery.

Retailing includes subordinated services, such as delivery. The

term "retailer" is also applied where a service provider services

the needs of a large number of individuals, such as for the

public. Shops may be on residential streets, streets with few or

no houses or in a shopping mall. Shopping streets may be for

pedestrians only. Sometimes a shopping street has a partial or

full roof to protect customers from precipitation. Online

retailing, a type of electronic commerce used for business-to-

consumer (B2C) transactions and mail order, are forms of non-shop

retailing.

Types of Retail Outlets :

Although most retailing is done in retail stores, in recent years

non-store retailing -- selling by mail, telephone

(telemarketing), door-to-door contact, vending machines, and

numerous electronic means -- has grown tremendously. Retail

stores come in a variety of shapes and sizes, and new retail

types keep emerging. They include:

Specialty stores carry a narrow product line with a deep

assortment within that line. Examples include stores selling

sporting goods, books, furniture, electronics, flowers, or

toys. Today, specialty stores are flourishing, due to the

increasing use of market segmentation, market targeting, and

product specialization.

Department store carries a wide variety of product lines.

Each line is operated as a separate department managed by

specialist buyers and merchandisers.

Supermarkets are large, low-cost, low-margin, high-volume,

self-service stores that carry a wide variety of food,

laundry, and household products. Most US supermarket stores

are owned by large chains such as Safeway, Publix, Winn-

Dixie, Jewel, and Tops. Chains account for almost 70% of all

supermarket sales.

Convenience stores are small stores that carry a limited

line of high-turnover convenience goods. Examples include 7-

Eleven, Circle K, Wilson's Farms, and Starvin' Marvin. These

stores located near residential areas and remain open long

hours, seven days a week. Convenience stores must charge

high prices to make up for higher operating costs and lower

sales volume, but they satisfy an important consumer need.

Superstores are almost twice the size of regular

supermarkets. Many leading chains are moving toward

superstores because their wider assortment allows prices to

be 5-6% higher than conventional supermarkets.

Hypermarkets are even bigger than combination stores,

perhaps as large as six football fields. Hypermarkets

combine discount, supermarket, and warehouse retailing, and

operate like a warehouse they usually give discounts to

customers who carry their own heavy appliances and furniture

out of the store.

Elements / Components of Retail Operation:

In order to ensure a smooth flow of operations at the store

level, it is necessary that the management defines processes and

has the people and the resources to important them. The tasks to

be performed and the processes are usually defined in a Store

Operations Manual. This document lists the tasks which need to be

carried out at the store level; it states the responsibility and

the time period in which these tasks need to be performed. A well

prepared operations manual or blue print is the starting point of

efficient store operations.

Typically in a retail store, the following tasks need to be

performed:

1. Store Administration and Management of the premises;

2. Managing inventory and display;

3. Managing Receipts;

4. Customer service and

5. Managing Promotions, Events, Alliances and Partnership

1. Store Administration and Management of the Premises

Managing the operations of a retail store starts by determining

how the tasks pertaining to the premises are to be performed.

Firstly, the duration of the hours for business need to be

determined. It is also necessary to specify with whom the

responsibility of opening and closing the store lies with. Some

consideration which need to be taken into account while

determining the business hours are: the target audience for the

store and the kind of products which are to be retailed. For

example, a supermarket selling groceries will need to have early

opening hours as compared to a lifestyle store, which may open a

little late in the day and remain open for longer hours in the

evening. The second factor which affects the working hour of a

retail store is the store location. A free standing store can

operate at hours that it chooses to, while a store which

is a part of a shopping center or mall will need to follow the

hours decided upon by the management of the mall.

Security of the store premises and of the merchandise in the

store is equally important. The size of retail store and the

level of operations determine the level of security required. A

small independent retailer may not really need security for his

premises, but a large department store may consider it necessary.

Security of the premises is necessary in order to ensure that

miscreants do not spoil the retail. Store security of merchandise

is needed to ensure that pilferage of merchandise or shrinkage as

it is commonly termed is minimal. Inventory shrinkage may arise

due to theft to buy employees, customers or by error on the part

of store at the time of receiving merchandise. A large numbers of

retailers across the world use specially designed tags, which are

attached to products. These tags are sensed by the electronic

devices specially designed to detect them and are usually placed

at the store entrances and exists. If an attempt is made to take

the product out of the store without removing these tags, an

alarm goes off, thus alerting the store personnel. The other

device used for monitoring the movement of customers and staff;

so that they can be checked each time they leave and enter the

store premises.

2. Store Administrations

Store administration deals with various aspects like the

cleanliness of the store premises, maintenance of the store

facade and the display windows, etc. Administration is also being

responsible for utilizing the store personnel effectively. Time-

keeping for the store staff is important. It is also necessary to

keep track of holidays and the shifts that the staff may be

required to work for. The premises of the store need to be

maintained as per the standards decided upon by the management.

This involves the task of cleaning the store and arranging the

merchandise before the first customer can walk into the store.

An important task of administration involves ensuring that all

the required permissions and licenses to run a retail

establishment are procured from the right authorities.

3. Managing Inventory and Display

The task of allocating the merchandise to the various stores

usually rests with the merchandise management team or the

category manager, as the case may be. At the store the store

staff managers this inventory. To enable them to work

efficiently, complete procedure for the handling of merchandise

at store level needs to be documented.

Responsibilities with respect to merchandise at the store level

involve receiving and in warding the goods. Once the merchandise

is received at the store, the quantity and other details like

colors, style and size have to be checked with the document

accompanying the goods, to detect any discrepancies. In the case

of most large retailer, using a hand held scanner, the

merchandise is scanned and the system updated for the stocks

received.

Merchandise may be received at the store from a Central

Warehouse, a Regional Distribution Center, from a supplier or

from another store. Proper documentation also needs to be done

when returning goods to the various locations as and when

required. The procedure to be followed for shop soiled goods and

customer returns also needs to be clear.

An integral part of managing inventory at the store level is

displaying it correctly. The best merchandise may lie unsold if

it is not displayed in a manner that is appealing and convenient

for the customer. For example, in a supermarket, if 5ltr packs of

vegetable oil are placed on the topmost shelf, it may be

inconvenient for the customer to pick one up and carry,

considering the fact that most of the customers at a supermarket

would be women. In case the retailer is running any theme

promotion or campaign, the products on offer need to be displayed

correctly, and replenished once sold.

4. Customer Services

The customer service policy to be adopted by the retailer is

decided upon by the top management. This is actually put into

practice by every person working within the retail store.

Customer service does not have to begin and at the customer

service counter in the retail store. Each person on the floor of

the retail store can ensure that the customer, who comes in

contact with him or her, is comfortable and has a pleasant

shopping experience. This is something which has to be imbibed in

them, and this has to be a top down approach.

An important aspect which affects a customer's perceptions of the

retail store is the experience that he has while billing the

purchased by him. While a customer may spend hours choosing the

product that he likes, he does not like waiting for a long time

at the time of payment. Long queues may result in some

disgruntled customers. Store operations need to be geared to

handle such a situation. Many stores infect -train each member of

the staff to handle the cash counter. Many supermarkets and other

retailer have also introduced express checkouts for customers who

have bought a limited number of products do not have to wait.

Retailer needs to be sensitive to the issue of efficiency of

billing at times when the number of people buying from the store

increases substantially. Specific days of the week may show a

trend of increased billing. This may also happen during a

discount sale, Eid, Easter, Diwali, Ramadan, Christmas, New Year

and other such occasions. Mobile cashiering and the concept of

fast lanes for billing is a concept yet to be explored by most of

the retailer.

5. Managing Promotions, Events, Alliances and Partnership

Events and promotions are varying much a part of the retail

marketing scene. In order to enable the success of an event or a

promotion, it is necessary that the store where the action is to

take place be geared for the same.

This may require hiring of additional staff, working existing

staff in shifts and running short training programs on the

features of the promotion, the hours and the specialty of the

merchandise. Many a times, a retail store may have tie-up with a

local partner to promote certain products or services. This has

to be managed at store level. Managing alliances and partnerships

with local partners is also an important part of retail store

operations.

Display of merchandise and point of purchase material has to be

managed at the store level. The complexities of managing a retail

store also depends on the type of retail store and the products

retailed. While the merchandise sold in a department store or a

high fashion boutique changes from season to season, the

expertise required for the operations of a a supermarket is very

different. An integral part of managing a supermarket comprises

of understanding fresh produce, its storage needs and replacing

it when needed. It also involves understanding the temperatures

at which meat needs to be frozen, stored and displayed. Control

of perishable and sanitation are two important aspects of the

operations of a supermarket. Managing the operations of a retail

store is a challenging task. Efficient operations management is

necessary to archive the retailer's objectives and long term

success. The store is an important aspect of a retail business.

Purchase decisions and the perception and image of the store are

made here. From the management's point of view, operations of the

retail business and it are imperative that the operations are

managed well to achieve and sustain customer satisfaction and be

cost effective.

Processes, people and tasks need to be defined by the management

to ensure the smooth flow of operations.

The Store Operations Manual is a document that lists the tasks,

the responsibilities and the time period in which these tasks

need to be performed. A well-prepared operations manual or blue

print is the starting point of efficient store operations. The

chief aspects of store operations include store administration

and management of the premises, managing inventory, display and

receipts. Customer service and managing promotions, events,

alliances and partnership are also integral to operations.

6. Cashiering Process in Retailing

Individual accounting includes the concept that transaction

amounts processed by each individual, including each check

handling and depositing processes. Therefore, if the stamp that

is used to restrictively endorse the back of a check is not

unique to the cashier, for example, when a cashier either shares

an endorsement stamp with other or uses a generic endorsement

stamp, it is preferable that the cashier initial the back of the

check.

Several campus units have two people who share cashiering duties

and use the same cash drawer. In this situation, individual

accountability does not exist. Therefore, the unit manager needs

to track the daily deposit reconciliation so if shortages occur

frequently, additional controls are put in place. When cash,

checks and other negotiable instruments are transferred from one

person to another, there should always be a document signed by

both individuals that identifies each amount transferred by

category, i.e. currency, coin check or any other negotiable

instrument. The two signatures on the transfer form indicate that

each person has counted and totaled the amounts and both parties

agree that the amount listed on the form is the amount actually

transferred at every step in the process.

Do retail store ensure customer loyalty?

Yes. Retail stores are the last stage of the supply chain

management which deliver the products to the end users. So here,

they get the direct access to the consumers. Those customers, who

get all types of products from one retail shop, feel comfort to

visit that retail store again and again. If that retailer can

ensure proper care and benefit to those customers, they become

loyal and do not change their mind to visit another retail shop.

Large retail stores like, Taradin, Shopno are the good example

who ensuring customer loyalty. They are trying to provide best

quality products with reasonable price and also treated their

loyal customers as their partner.

Advantage and disadvantages of retail store:

Advantages:

The commercial marketplace has evolved to the point where retail

sales no longer have a monopoly on the consumer world. To

elaborate, consumers once relied almost exclusively on retail

outlets for their needed goods, but today you can purchase from

online stores, auction sites, wholesale outlets, liquidation

centers, and in some cases, you can even go straight to the

manufacturer. If you sell any kind of merchandise, there are

still advantages to using traditional retail outlets.

1. Customer Rapport

In a retail setting, customer rapport benefits both you as a

buyer and as a seller. Retail outlets allow customers to see what

they are buying up close and, as opposed to online stores; they

provide instant gratification, because the customer walks away

with their purchases immediately. A friendly and helpful staff

also helps to build customer loyalty, ensuring that customers

return again and again. From a business standpoint, retail

outlets allow you to reach a customer base that might be put off

by the online marketplace.

2. Greater Inventory Options

While considering wholesale vs. retail, retail sales provides

greater inventory options because not all the merchandise is

available on the wholesale market. To provide a bit of

perspective, wholesale goods come straight to the manufacturer to

a wholesaler, usually mass produced at a low cost. The wholesaler

may sell to a retailer or sell to the public directly. But

because not all goods can be mass produced at a low cost, the

wholesaler is limited in terms of inventory. By contrast, a

retail business can produce goods for itself, purchase from

wholesalers, or directly from manufacturers.

3. Greater Sales Potential

With a retail outlet, you can sell a variety of products and

expose customers to items that they didn't even know they needed.

For instance, a customer might enter the outlet looking for a

pair of jeans, but then wind up purchasing jeans, three shirts, a

belt and a tie. By consolidating a variety of merchandise in one

central location, you dramatically increase your sales potential.

4. Less Drama

If deciding whether to sell in a retail outlet vs. online,

consider that a retail outlet spares you from having to charge

shipping costs and from having to deal with lost packages,

tracking codes, customer addresses and complicated online sales

databases. With a retail outlet, you can make each sale with

greater confidence and fewer conflicts.

5. Benefits from Consumers

If you are consumer and are considering reasons to shop at

traditional retail outlets, as opposed to online, consider some

of the same benefits. You can save on shipping costs, receive

instant gratification, inspect your items carefully before making

your purchase and not have to worry about packages getting lost

in the mail. You also can have all of your questions answered

immediately by helpful staff, rather than having to rely on email

messages and phone calls.

Disadvantages:

One of the necessary evils of the business world is retail sales.

Each day people are buying something which means that there is

always a need for retail businesses. Everyone who buys anything

deals with retail in some form or another. While retail is

changing in our highly technological world, there are still some

basic facets that remain the same. The following are just a few

of the reasons that people resent working for retail businesses.

1. Lousy pay

Most retail companies pay little more than minimum wage and there

are few if any benefits. One of the main reasons that these

stores pay little is because of the high turnover in employees.

The longer a person remains with a company, the higher they can

climb and the higher their salary rises. Pay or the lack of pay

is one of the major drawbacks of working for retail companies.

2. Instability

The retail business is less than stable, especially in uncertain

economic times. The retail business is often impacted by the

bottom line. The store is either making a profit or it is losing

money for the company. Retail chains are usually brutal when it

comes to the bottom line and will close stores that cannot make

profit.

3. Lousy hours

Another issue that many retail employees have with the company is

the hours. Most retail stores require their workers to staff the

store over weekends and work during holidays. Retail work is

often focused on specific times when people are most likely to

shop.

4. Cranky customers

Dealing with people can always be difficult and especially when

they are the paying customer. The old saying: the customer is

always right often drives sales clerks mad. Dealing with

customers who are less than cooperative can be more than a little

stressful.

5. High staff turnover

High worker turnover becomes an issue in working for retail

stores. The constant change in work environment can be

frustrating to the employees. The moment that things become

stable, someone leaves and creates more chaos. Staff turnover

often makes employees realize that there are other places of

employment and they begin searching. The reality is that changing

workplace makes employee’s desire change for themselves.

6. Busy versus slow periods

No matter what the type of retail business; there will always be

high and low times. There are times in retail work that are so

busy that it is nearly impossible to keep up. There are also

times when the business is so slow that time seems to stand

still. Learning to deal with these issues is important for those

who pursue a career in retail. Times like Christmas will be

incredibly busy and other times will seem much less important.

These are just a handful of the many reasons that people do not

like working for retail employers. The pay is less than

fantastic, the hours are terrible and dealing with customers can

be less than enjoyable. The reality is that the retail business

is always looking for employees and will always be a part of

society, as long as, malls and stores are in existence.

http://www.businessdictionary.com/definition/customer-loyalty.html

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http://www.abadvisors.com/pdf/Loyalty%20article.PDF

http://www.zendesk.com/resources/building-customer-loyalty

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http://en.wikipedia.org/wiki/Retail

http://smallbusiness.chron.com/advantages-retail-outlets-36821.html

http://www.careerpath360.com/index.php/disadvantages-of-working-in-retail-8814/